Medco sets aside $356m for expansion

JAKARTA. Publicly listed PT Medco Energi International will allocate up to US$356 million for capital expenditure in 2012, to finance exploration and development of new oil and gas fields in the country and overseas.

“We have arranged to spend $1.2 billion next year; $356 million of which will be used as capital expenditure and the $818 million as operating expenses,” company president director Lukman Mahfoedz said during his company’s public expose on Thursday.

Director of finance Syamsurizal Munaf said that the company would use internal cash and standby bank loans to support the capital expenditure.

“As of today, our cash stands at more than $500 million. We also still have credit facilities from Bank Mandiri, BNI and BRI. Half of the capital expenditure will be funded from our internal cash and the other half will come from the banks,” Syamsurizal said.

According to figures available at the public expose, Medco has standby loans from BNI worth $140 million, from Bank Mandiri $100 million and from Bank BRI $150 million.

The capital expenditure will be used to finance the company’s main development projects, which are gas field development in block A in Aceh to reach production of up to 110 million metric cubic feet per day (MMscfd) by 2013, an enhanced oil recovery site in Rimau in Sumatra, gas field development in Senoro in Sulawesi to reach production of 250 MMscfd, an LNG plant in Donggi-Senoro in Sulawesi to reach a capacity of 2.1 million tons per annum (mtpa), a geothermal power plant project with a planned capacity of 3x110 MW in Sarulla in Sumatra and oil field development in Libya with a planned capacity of 2x25,000 barrel of oil per day.

Medco is cooperating with various institutions to run the development projects.

For the oil field development project in Libya, the company is cooperating with the Libya investment authority.

“We have explored 20 wells in area 47 in Libya. We recorded good result as we’ve found oil in 18 of the wells explored. We have finished the exploration and will build facilities starting from next year to 2014. We hope the oil filed in Libya will start production in early 2015,” Lukman said.